The development at Bucknall New Road, in Hanley, will replace 155 existing council flats, with eight blocks set to be demolished.

These will be the low-rise blocks in Bucknall New Road, Dane Walk, Linfield Road, Ringland Close and St Ann Walk, and the maisonettes in Ashmore Walk, Bucknall New Road and Linfield Road.

Homes will also be built on the cleared site at Pyenest Street, Shelton.

The council is hoping to secure £15 million of Homes England funding for the scheme, with Cheyne Capital set to provide another £25 million.

Randy Conteh, cabinet member for housing, says that working with private but socially-minded investors, and the Government, will help the authority meet demand for affordable housing while sharing the risk.

Artist's impression of the Bucknall New Road apartments

He said: “Both of these areas are main routes into the city centre. As a Stokie, I’ve noticed that even though they may have been newer developments back in the 60s, the reality is they’re looking a bit tired.

“In terms of delivering for our residents, especially our elderly residents, we need to start thinking about quality and modernisation. In some cases, like with the high rises, we can get away with a refurb, but in terms of some of our accommodation it’s better to rebuild.

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“The proposed homes are a lot more modern, and we can do that through this new partnership arrangement. Sometimes, in terms of our housing revenue account, we haven’t got the capacity to actually achieve the housing ambitions we have, in order to accommodate the elderly population that’s coming and to address the shortage of properties. If we have a housing waiting list, and we’re only building so many houses a year, then we’ll never get that list down. So sometimes we need to do something else.”

Cheyne Capital will own the housing and lease them back to a new council company, which will offer them for social rent and take responsibility for maintenance. And after 40 years the city council will have the opportunity to buy the homes for £1 each.

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The Pyenest Street development, which will include 51 apartments and 62 houses, will start first and is expected to be completed by spring 2022.

These homes will be offered to the tenants and leaseholders at Bucknall New Road, who will be ‘decanted’ to make way for the site’s redevelopment, which is set to finish in 2026. This will see 226 apartments built, meaning there will be a net gain of 224 homes across both sites.

Tenants in the new properties will be treated similarly to council tenants, but will have no right to buy.

Artist's impression of the Bucknall New Road apartments

Cheyne Capital insists that the arrangement with the city council will be different to private finance initiatives, which have left some authorities locked into eyewatering repayments.

Darren Carter, investment manager for social property at Cheyne, said this deal would actually favour the city council, as housing benefit would increase at a faster rate than the authority’s lease payments.

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He said: “Cheyne is an asset manager, but we wanted to offer a product that balances social return with a financial return. Everything investment professionals do doesn’t just have to be about cash, you can have that social ethos as well.

“We can’t enter into relationships that don’t stack up for both parties. PFI was very much one-sided to the private sector’s benefit.

“All we want is our starting rent, increasing with the consumer price index. Any extra income, or any efficiencies, would go to the council.”

The Bucknall New Road estate in Hanley

The high rises at Seddon Court, St Luke’s Court and Lindop Court, and the low rises at Matthews Walk, Perry Close, Wainright Walk and Wellington Street, will not be affected by the scheme.

Around 60 of the flats set for demolition are already empty, as the council has not been reletting them. The council has sent out leaflets to residents, updating them on the scheme.

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Robert Dyson, secretary of Bucknall New Road Estate Residents’ Association, said: “We have had that leaflet and the council say they’ll be giving us an update in the new year. But there are still a few residents who are unsure about what’s going to happen, and where they’re going to be moved to. A lot of them want to stay in the Hanley area. I think it will come down to individuals whether they want to move to Pyenest Street.”

Council leaders insist that everyone who has to move out of the Bucknall New Road blocks will be found suitable alternative housing.